The euro zone economy grew much faster in the first quarter of the year than in the previous three months despite the impact of the war in Ukraine, the European Union statistics office said on Wednesday, revising its earlier estimates sharply higher, according to Reuters.
Euro zone employment growth was also revised upwards, to show a further acceleration in the January-March period compared with the previous quarter.
In its final reading for the January-March period, Eurostat said the gross domestic product (GDP) of the 19 countries sharing the euro rose 0.6% quarter-on-quarter, for a 5.4% year-on-year expansion.
The figures were significantly revised upward from a previous flash estimate released in mid-May, when euro zone quarterly growth was estimated by Eurostat at 0.3% and the year-on-year expansion was expected at 5.1%.
Eurostat said its earlier estimates were based on a more limited data set and on preliminary estimates from EU governments now revised by national statistics offices.
The final data show that euro zone growth gained speed in the first quarter from a lacklustre final quarter of 2021, despite Russia’s February 24 invasion of Ukraine, which disrupted supply chains, hit confidence and caused energy prices to soar.
The negative impact of the war is however expected to be felt in the second quarter. Growth in the euro zone slowed significantly in the last quarter of 2021, to 0.2% from a 2.3% quarterly expansion in Q3, Eurostat’s final data show.
The better-than-expected growth in the first quarter was driven by a rise in exports and stocks, which more than offset drops in governments’ expenditure and consumers’ purchases.
Economic growth was very strong in smaller countries, with Ireland posting a stellar 10.8% quarterly expansion. Among the largest economies of the bloc, GDP grew 0.2% in Germany and 0.1% in Italy, while falling 0.2% in France.
Employment growth in the first quarter was 0.6% quarter on quarter and 2.9% on the year, Eurostat said, revising its earlier estimates from 0.5% and 2.6% respectively.
Employment growth also accelerated from the previous quarter when it was 0.4% quarterly and 2.1% on the year.